October 29, 2019 | By RGR Marketing Blog

Helping Your Clients to Better Understand Home Appraisals

buy Mortgage LeadsIf you’re a mortgage broker, you’ve probably already discovered this simple fact. For many of your clients, especially first-time homebuyers, the loan qualification process can seem like the only hurdle they need to clear. For some buyers, loan qualification can be a major hurdle to cross. But loan qualification is hardly the only challenging part of buying a home, especially in a competitive market.

In a challenging market, finding a home worthy of purchase, and one that fits the loan they’ve qualified for, can be even harder than qualifying for a loan in the first place. Then you have inspections, the appraisal, and more. For many of your clients, the final stages of buying a home can derail their efforts at a very heart-breaking stage.

Helping them understand how the appraisal, the inspection, and their loan combine to make up the complete financial picture of their home buying experience isn’t may not exactly be your job. But providing clients with professional insight can go a long way toward earning their referral business once they are happy in the new home you helped them obtain. With that in mind, here is what your clients need to know about home appraisals.

What a Home Appraisal Is (and Isn’t)

In a nutshell, an appraisal is a report on the actual real worth of the home and property in question in the current market in which it is being offered for sale. Home appraisals are performed by licensed home appraisers whose job it is to be unbiased in their evaluation of a property’s worth. Appraisals are meant to help lenders and potential homeowners understand the value of a particular chunk of real estate.

An appraisal is not necessarily a reflection of what the property in question could potentially fetch in the market in question. This is especially true in a tight market where demand is high and inventory is low. This is often where buyers get into trouble, as lenders have a difficult time providing more money in the form of a loan than a property is actually worth.

The Home Appraisal Process

There are several parts to the home appraisal process. The appraiser will generally visit the property in question for an in-person evaluation. This differs from an inspection, where an inspector looks for problems that a home has and determines how much it will cost to fix them. Instead, the appraiser is looking more for larger issues that affect the value of the home and property itself.

The appraiser also looks at comparable homes in the same geographic area that have been sold recently to help determine the actual current value of the real estate in question. The appraiser then prepares a final report of value, describing the home and its condition, any major issues noticed during the property assessment, the features of the home and property, and the surrounding area. The report will further list the comparable properties that were used to determine value and a market analysis.

Home Appraisals in a Nutshell

There is a bit more to a home appraisal than will fit in an article of this nature. That said, the basics are listed above, and for most homebuyers, will suffice as an introduction to this part of the home buying process.

With you there to help them understand the entire process and what to expect from the very beginning, they will hopefully make it through and be happily referring you to their friends, coworkers, and family as the mortgage broker that was a valuable resource throughout their experience.

If you are looking for additional leads beyond what positive word of mouth is bringing your business, then it’s time to consider purchasing high quality mortgage leads from a reputable lead broker like RGR Marketing.

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